Political concerns see sterling fall

Sterling has fallen against the euro amid growing political concerns.

A recent opinion poll carried out by ComRes for the Independent has found that a hung parliament result in the general election in June is looking increasingly likely.

This has led the pound to fall due to worries that a split parliament would be unable to implement a sufficiently strong fiscal programme.

Uncertainties over whether the Bank of England will take a break from its quantitative easing policy have done little to reassure traders.

Gavin Friend, currency strategist at nabCapital, told Reuters: "GDP has been disappointing. There is a question mark over QE and this week we've had a poll shift. Clearly the risk of a UK sovereign ratings downgrade is on the radar and I am sceptical that sterling can make gains until the polls turn around."

Sterling was trading at one pound for €1.144 at around 14:00GMT today (February 2nd).

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Posted by Eleanor Ward